recoupment
The Department for Work and Pensions (DWP) is entitled to recover any Job Seekers' Allowance or Income Support that an employee has received in respect of a period for which a tribunal has awarded the employee compensation for lost earnings. When the tribunal makes the award, it will order the employer to withhold a specified sum and pay the employee the balance only. The DWP will then notify the employer of the amount of benefits that the employee has received. The employer must then pay the DWP that sum and pay the employee the balance of the amount it had withheld.
This procedure, known as recoupment, applies only where a tribunal makes an award of compensation. It does not apply to settlements. It therefore provides a major incentive for an employee who has been claiming benefits to settle a claim in advance of a tribunal hearing.